There’s not much certainty for the coal industry these days. In Montana, four of the six owners of the Colstrip Power Plant live in states where legislation is requiring companies to wean themselves off of coal energy. Residents of Colstrip — a town that has grown and prospered because of that resource — fear that any bad news for the industry will be even worse for them. Up against shifting markets and corporate interests, how can advocates for Colstrip ensure future stability for its residents?
Read more about the Southeastern Montana Economic Development’s diversification strategy for Colstrip.
Learn more about what else the Coal Severance Tax Trust Fund pays for.
Follow the Montana Legislature’s interim study of the Coal Severance Tax Trust Fund.
Transcript
Mara Silvers Welcome to Shared State. I'm Mara Silvers. This season, we have stories of Montanans moving through thorny political conflicts. Today, reporter Melissa Loveridge has a story for us about a town in transition.
Ray Loveridge And then we're going to turn on to the road where the mine is, and-
Mara Silvers Melissa, set it up. Where are we?
Melissa Loveridge We are on a little driving tour near the coal mine in Colstrip in southeastern Montana.
Ray Loveridge And you can look to the left and right both sides and see the conveyor belt [fades]
Melissa Loveridge Which is actually my hometown. I'm driving around with my parents.
Ray Loveridge And as we're going south out of Colstrip [fades]
Melissa Loveridge Colstrip is pretty small and a lot of the jobs either directly are tied to coal or are kind of auxiliary jobs. You know, people who work at restaurants that serve mostly miners and their families or people who work at the plant and their families.
Ray Loveridge Good? Where to?
Melissa Loveridge To home. Home is good.
Mara Silvers Tell me more about what's been going on in Colstrip lately.
Melissa Loveridge Well, it feels like Colstrip is edging up to the precipice of a really big change. So since the 1970s, this mine has fed coal to a power plant across the highway, and the plant has provided power to customers across the northwest United States. But lately, energy customers that are based in Washington state and Oregon especially are being required to purchase more renewable power to limit fossil fuels' impacts on climate change. This means that a majority of Colstrip's power plant owners are pulling out by 2030. And so far, there aren't any new buyers that are lined up. The downturn has kind of already begun. In town, there are these four stacks, these four powerplant units. You can see them from most of town, and in 2020, two of them were decommissioned. That happened a few years earlier than expected. If you go to Colstrip now, the lights are still blinking on the sides of the decommissioned units, but no steam is coming out of the top.
Mara Silvers What about these recent events made you want to do a story about your hometown?
Melissa Loveridge Colstrip is just in such a moment of uncertainty. It feels like when a cartoon character runs off a cliff, like when they're frozen in midair just before they start falling. And I'm watching my hometown, and the people who have made it what it is, try to figure out what they can do to keep their town alive as the energy market shifts out from underneath them. My mom, Twila, has lived and worked in the schools in Colstrip since 1980s, and she said that when plant workers lost their jobs after those two units shut down, there was kind of a ripple effect in the community.
Twila Loveridge Some of the people from units one and two transferred their jobs to units three and four, but some of them retired or went to jobs elsewhere. So that was kind of a scary thing because there were some really good educators that left because their spouses' jobs ended.
Melissa Loveridge My dad, Ray, moved to Colstrip when he was in junior high school and has worked at the mine for nearly 20 years, and he's seeing changes too.
Ray Loveridge Couple friends and I had always said that we'll be the last to leave, you know, and we'll have to decide who turns the lights out. We always thought, you know, we'd be here till the end, but nobody's going to want to stick around to turn the lights out if there's nothing to stick around for.
Melissa Loveridge Coal has been a huge moneymaker, not only for Colstrip, but for Montana more broadly. So while some people are trying to figure out what's next for Colstrip if coal goes bust, others are trying to hold on to coal and make sure that the entities that got rich off of it do right by the community that helped it boom.
Mara Silvers In this episode, a small Montana town caught in a global energy and economic transition. OK, Mel, how do you want to start the story?
Melissa Loveridge I want to start us back in the 1950s. Back then, Colstrip was booming as a supplier for the railroad company that established the town. But then the railroads stopped using coal and started using diesel.
John Williams The town died. That's what happened.
Melissa Loveridge That's Colstrip's long-time mayor, John Williams.
John Williams I came to Colstrip as an employee of Montana Power Company.
Melissa Loveridge He moved to Colstrip in the early 1970s, shortly after the mine was reopened, this time to fuel a new coal-fired power plant. So John has seen this boom-bust cycle play out in Colstrip before.
Mara Silvers How does he feel about potentially shifting away from coal now?
Melissa Loveridge Well, he's apprehensive, but he's actually pretty optimistic because people have worked to make Colstrip a more resilient place. John says that when he first moved here, it was a true company town. The Montana Power Company handled town stuff like the water system and the sewer system. Colstrip wasn't even incorporated. But by the 1990s, residents wanted more of a say in their own future. So Colstrip incorporated as a town in 1998. I, at the time, was one of Colstrip's youngest residents, at the ripe old age of one. And, after incorporating, John was elected as mayor.
John Williams We would do it ourselves. We would create our own destiny and work towards the future to see what values there could be with our own self-governance.
Mara Silvers I just feel like that is such a bootstraps kind of founding narrative about Colstrip. Like, we're just going to make this thing work for us and we're going to see to its future. And I'm thinking about that mixed with all the uncertainty that Colstrip is facing now. What does John think is the best way forward for the community?
Melissa Loveridge John, like a lot of people in Colstrip, really hopes for a change that prolongs Colstrip's good run with coal. The property taxes that come from the coal companies pay for a big slice of the city services pie, like garbage trucks and water infrastructure and the community center.
John Williams How do we continue to fund those with the plants depreciating out and without new businesses coming into our community? That's the challenges that we're looking at, because we want to still be able to maintain the same quality of services that are provided.
Melissa Loveridge As mayor, John is thinking about Colstrip's future at a very local level, but he has an ally in the state legislature in the form of Sen. Duane Ankney.
Duane Ankney Sen. Duane Ankney from Senate District 20, coal country.
Mara Silvers Duane Ankney really has a reputation as being ride or die for Colstrip.
Duane Ankney Coal miners and associated industry people sent me up here.
Melissa Loveridge Yeah, he moved here in the 1980s for a job at the mine. He's got that iconic mustache and he drives this four wheeler-style vehicle called a side-by-side around town when the weather is warm.
Duane Ankney But you can't hardly touch a dollar up in the- up here that don't have a little coal dust on it.
Melissa Loveridge A lot of people say Duane is resistant to change or that he doesn't believe in climate change, which is not true. He just thinks that we need on-demand energy sources.
Duane Ankney When the wind don't blow and the sun don't shine, you don't get electricity.
Melissa Loveridge But he feels that he's looking out for Colstrip.
Duane Ankney It's changed from a very comfortable community where everybody went to work and made a very good living wage to a community of very uncertainty, not knowing what the future holds for them.
Melissa Loveridge The way he sees it, coal has made the state of Montana buckets of money, and now he thinks the state owes it to Colstrip to make the owners of the power plant accountable for ensuring a stable transition if and when they leave. Or, better yet, have the state incentivize them or some new owners to stick around. He says other lawmakers, especially ones that haven't worked blue-collar jobs, don't understand the bind Colstrip is in and what it's like for people living there.
Mara Silvers You know, as somebody who covered the last legislative session, I should just say that some of these bills can be incredibly complicated.
Sen. Sue Malek I'm not against the coal miners, I'm not against the coal.
Mara Silvers Opponents of one of these bills from 2019 pointed out that it could allow companies to pass off costs to their utility customers, who would likely see their electric bills climb.
Sen. Sue Malek I am for the ratepayers. I am for the elderly trying to pay their bills every month. I am for the single mother raising her kids and trying to pay her utility bills.
Mara Silvers But then there are other lawmakers and stakeholders who just don't want to support legislation that keeps Colstrip reliant on the coal industry.
Melissa Loveridge Yeah, and I find that interesting, because if coal leaves Colstrip, the state will feel the impacts too.
Mara Silvers OK, break that down for me. Why are these two things so intertwined?
Melissa Loveridge To do that, I need to take us back to the 1970s, to another lawmaker named Tom Towe.
Tom Towe I'm an attorney in Billings, and I've been in Billings since 1967, which is several years.
Melissa Loveridge Tom wrote a bill that ensured that the state of Montana would continue to profit off of coal long after it went bust. Tom is a Montana guy. He knows the stories about Butte and the richest hill and how the copper kings made their fortunes here. He also knows that they then took that money elsewhere after they made it in Montana.
Tom Towe What do we have in Montana to show for it? Well, most of it's gone and disappeared, and we don't have anything to show for it.
Melissa Loveridge Tom wanted to find a way to make sure that history doesn't repeat itself this time.
Tom Towe And it's just as sure as you have a boom, you're eventually going to have a bust. Let's make sure we have something that stays with us for a long time.
Melissa Loveridge So in the early 1970s, Tom is watching Colstrip as the Montana Power Company builds the Colstrip power plant and it starts growing as this company town. He's also serving in the Montana state Legislature.
Tom Towe A whole bunch of people got together right on the floor of the Senate, and we decided we needed to make a trust fund.
Melissa Loveridge Tom and his gang at the Legislature came up with this weird and complicated and really long-lasting piece of legislation that ramped up coal taxes and created this wonky thing called the Coal Severance Tax Trust Fund.
Mara Silvers Oh my God, I love a really complicated name that's actually really important. What is the Coal Severance Tax Trust Fund? Did I get it right?
Melissa Loveridge Yeah. Basically, Tom wanted to make a lockbox based on coal taxes that would collect interest but never be spent itself. That interest, though, that's paid for all kinds of things. It's paid for water infrastructure projects all over the state, economic development, school facilities. And coal taxes more broadly pay for basic government functions, as well as all kinds of random stuff like art maintenance in the Montana Capitol building.
Mara Silvers I would not expect that.
Melissa Loveridge At first, Tom's bill also set up stuff for boom towns like Colstrip, like helping fund schools in at least some basic infrastructure. But while Tom's bill held on to coal tax revenue for the state's future, it's not like Colstrip can tap into the trust fund for its future, at least not without a big uphill battle.
Mara Silvers Why not?
Melissa Loveridge Because there's a pretty big catch.
Tom Towe Nobody could use the principal of the trust without a three-fourths vote of each house of the Legislature.
Mara Silvers OK, so a three-quarter vote of both chambers, I'm going to be honest, seems kind of unlikely.
Melissa Loveridge Exactly. That's because using that big pile of money, the principal, was never the point. And what's wild is that there's now more than $1 billion in the trust fund. Colstrip does benefit from some of those state-level taxes, but it can't access that whole piggybank itself, even though the town and other communities in Montana helped build that bank.
Mara Silvers It sounds like Colstrip is in this spot where it needs to figure out its own future, even though it's going through a transition that it didn't really ask for. I have to guess that there are examples of other places that have gone through a transition like this without a trust fund in place.
Melissa Loveridge Yes. A lot of people are thinking about how Colstrip and other towns that are dependent on coal and oil and other resources can avoid the boom and bust cycle.
Mara Silvers OK, buckle up. Melissa's going to share some of those stories after this break.
Mara Silvers Welcome back to Shared State. I'm Mara Silvers. A lot of small rural towns are feeling the pressures of an international shift away from fossil fuels to green energy as world leaders try to avoid the worst-case scenarios of climate change. And Melissa Loveridge, reporter from one of these small rural towns of Colstrip, you found that this raises a lot of questions about who gets to decide what that transition feels like. And what, if anything, is owed to these towns that have helped their states prosper?
Melissa Loveridge Yeah, I think one of the scariest ways for a lot of people that this kind of transition can play out is that companies just decide it's not profitable to keep running their mine or their refinery or the power plant and close down or go bankrupt.
News anchor Hundreds of coal miners are out of their jobs [fades]
Melissa Loveridge Sometimes leaving workers without severance pay, and the towns and even states reeling trying to figure out how to make up for lost coal and property tax revenues.
Mara Silvers OK, so that sounds like the worst-case scenario of a company just kind of pulling out and saying "bye forever." But are there any examples of towns making it work?
Melissa Loveridge I asked myself the same question, which is how I met Bob Guenther from Centralia, Washington.
Bob Guenther Well, I was born and raised in a little town south- actually southeast of the power plant in Centralia. I was born and raised [fades]
Melissa Loveridge And Bob, he's a big union guy. Bob worked there for three and a half decades. I wanted to talk to Bob because it's hard not to draw comparisons between his town, Centralia, and Colstrip. For a long time, Centralia was a lot like a bigger version of Colstrip, with a coal mine supplying coal to a coal-fired power plant. Centralia is bigger than Colstrip. More than 17,000 people, but like Colstrip, it also leans politically conservative. In 2006, the operator of the Centralia mine suddenly shut it down. They cited high operating costs. Bob said that the shutdown was very, very sudden, so sudden that some workers found out on their last day of work that it was going to be their last day of work.
Melissa Loveridge I mean, what was the, like, feeling in the community?
Bob Guenther Well, it was a gut wrench. We had about 600 workers there at that time, making $70,000 a year. And overnight they were gone.
Melissa Loveridge Bob said the job loss was actually higher because the people who worked at companies that provide goods or services to the mine directly like bearings and compressor companies, those went belly up too, and so did a lot of restaurants and other businesses that supported mine workers.
Mara Silvers That sounds absolutely devastating.
Melissa Loveridge Yeah, and that was only the first shoe to drop in Centralia. A few years later, a bill comes up in the Washington state Legislature to close down Centralia's coal power plant, too.
Bob Guenther I felt that just to turn the switch off on that plant was the wrong way to go. So we helped write a bill and helped legislate the opportunity to have an incremental shutdown of that power plant, and the incremental shutdown, they'd shut one plant down in December 2020 and then shut the other one down in December '25.
Mara Silvers So it sounds like Bob is suggesting something that's just spread out over a longer amount of time.
Melissa Loveridge Exactly. He bought Centralia extra years to create a thoughtful, intentional transition so that coal's end wouldn't wreck the community. A later shutdown means more plant workers will reach retirement age, so there will be fewer layoffs. Another part of the deal was that the plant owner, TransAlta, put $55 million into a transition fund. The city has used that money for immediate needs, like filling school budget holes and worker retraining, and some longer-term projects like installing solar panels. And there's pots of money to help laid-off workers pay for things like mortgages or more education or retraining, or whatever else those workers might need.
Mara Silvers There's transitional money for workers and town services. Is there anything else Centralia has done to make this shift smoother?
Melissa Loveridge One really interesting thing is that a group of people, Bob included, came up with this idea to turn the former mine site into an industrial land bank. The idea there is to develop some of this land and try to attract other industries that could come in and use the existing roads and power lines and stuff.
Bob Guenther We do not have a major customer, but we have had a lot of people snooping around, a lot of people taking a look at industrial land that we have available.
Melissa Loveridge You can see a future where Centralia is a hub for cybersecurity or the site of a hydrogen refueling station for West Coast travelers or a solar energy center. But that town is still in the middle of this transition. They've got plans for when their boom turns into a bust, but for now, they kind of just have to wait and see if those plans -- all that work -- is going to work.
Bob Guenther You know, my best hope is, is that we can actually reproduce jobs in this area that will actually pay a living wage for folks so they can stay home.
Melissa Loveridge After talking to Bob, I wanted to see if I could find someone who could tell me more about more communities. So I called Kelli Roemer.
Kelli Roemer I like to call myself a rural community development researcher that's studying community transitions within an energy transition.
Melissa Loveridge Kelli is a Ph.D candidate in the Resources and Community Research Group at Montana State University. Her research looks into this major question:
Kelli Roemer How can rural remote communities transition in the face of economic and environmental uncertainty?
Melissa Loveridge One facet of Kelli's research is that she's looking into the ways that other places and other industries have gone through this transition, like the Pacific Northwest and the timber industry. She wants to know how the lessons learned from those transitions could help other communities like Colstrip.
Kelli Roemer One is the importance of diversifying your economy before the decline occurs.
Melissa Loveridge Diversification, at least in this context, means giving workers more opportunities for work and local and state governments more entities that could pay taxes that will pay for essential services like garbage trucks. Another lesson from the timber transition is how important it is to look at local policy and make sure that there's a way for local governments to save basically a rainy day fund that could cover property tax losses if a big industry shuts down. Kelli said that proactive assistance programs can be integral in a successful transition for towns like Centralia and Colstrip. But she said those programs are often emergency assistance programs, and those aren't available until there's already an emergency.
Kelli Roemer Planning before the decline occurs is essential. And so a lot of times the support and the funding isn't available until it's a little too late.
Mara Silvers OK, so just to be clear, Kelli's thesis is that communities should be ready and preparing for changes before they happen.
Melissa Loveridge Yeah, and that idea of hers makes me think back to Colstrip where this big transition is, you know, kind of looming. As I talked to people for this story, I found out that a lot of planning is already in place. These emergency assistance programs, some of them exist back home in Colstrip, but they haven't been tapped into yet because the big emergency hasn't happened yet.
Mara Silvers And so by that, you mean like literally a shutdown of the plant or the mine?
Melissa Loveridge Yeah. And to avoid that, some people in Colstrip are hoping to keep the mine and the plant running so that that big emergency doesn't ever happen. Some are planning for a transition. They're hesitant, but they're getting ready to meet it. And some of those people are the same people; they are thinking in both camps. One of the people who is kind of embracing this idea of a change is Jim Atchison.
Jim Atchison I have never been more excited about Colstrip and southeastern Montana as I am right now, as far as the future goes.
Melissa Loveridge Jim is the executive director of the Southeastern Montana Development Corporation. He moved to Colstrip about 20 years ago for the job with the corporation. He's a super friendly guy with an office right near the bank and the dentist office in Colstrip. The corporation, which is a nonprofit, was formed in the late '90s to promote economic growth in southeastern Montana and to help address downsizing impacts from the then future decline of coal. Jim and the corporation dole out grants to businesses and nonprofits and work on community and economic development ideas.
Mara Silvers OK, so what are they thinking about? Are they thinking along the lines of what happened in Centralia? What are some of those ideas?
Melissa Loveridge The Southeastern Montana Development Corporation got some of the ideas from listening sessions they held a couple years ago. They drafted up what's basically a transition plan, and a major part of that transition plan is a diversification strategy, which is exactly like what we just heard from Kelli.
Jim Atchison We're pretty much a one-horse town, you know, and that's what we're trying to do, is diversify that. So we put a couple more horses in the barn to stabilize the economy.
Melissa Loveridge Jim says the big selling point for Colstrip is that it's already on the power grid. There are these big transmission lines that right now carry Colstrip coal power all over the northwest.
Jim Atchison We have those power lines, and those power lines are worth their weight in gold.
Melissa Loveridge The corporation has a bunch of different projects in the works, and one of those is the Colstrip Energy Park. It's very similar to the idea behind the land bank in Centralia, attracting another industry that would provide jobs and also pay taxes. They have a plot of land picked out, but the details are still kind of up in the air.
Jim Atchison Here's some layouts here [fades]
Melissa Loveridge Jim showed me some blueprints.
Jim Atchison [fades in] footprints, buildings, streets, egress/degress [fades out]
Melissa Loveridge Jim said there's ready electricity and ready space. It just needs to be developed and tapped into. He sees that there's opportunity for companies that are hoping to further develop carbon capture technology, or turning the waste from burning coal into construction materials. It's all part of that diversification strategy. Getting more horses in the barn, like Jim said, and working to avoid a downturn.
Mara Silvers How many of these projects are actually going to become a reality?
Melissa Loveridge Well, you know, a lot of these technologies Jim's excited about are still under development, and Jim isn't under any delusions that every good idea is going to have the legs to save Colstrip.
Jim Atchison Seven out of eight things we work on don't happen. And so the one or two that do happen, it's very exciting. And of course, the ones that we're working on [fades]
Mara Silvers OK, so, there's the development corporation that Jim is running. What are some of the other ideas percolating in Colstrip that could help with this transition coming down the pipe?
Melissa Loveridge Well, there are grants from the Colstrip Impacts Foundation. They have this pool of money earmarked for things like a no-strings-attached $10,000 for anyone who loses their coal job to downsizing. The foundation has also given money to businesses and nonprofits, but that worker grant, that $10,000 grant? No one has actually applied for that yet. It's like that Catch-22 Kelli mentioned about not being able to access help until after the bust.
Mara Silvers I guess I'm also curious about what the state of Montana is doing to help Colstrip transition or get ready to transition because the state gets a lot of money from Colstrip and the industry there. Is there anything that the Legislature or the governor has put forward?
Melissa Loveridge The state has taken some steps here and there, but there's been no real coordinated effort and definitely nothing that's made people in Colstrip feel like the future is more certain.
Senate chairman All right, last but not least, Sen. Ankney [fades]
Melissa Loveridge Sen. Duane Ankney has been thinking about what's next for Colstrip for a long time.
Duane Ankney Thank you, Mr. Chair, members of the committee.
Melissa Loveridge But lately, if you look at Duane's legislation, you can kind of see a little bit of a shift.
Duane Ankney Who looks out for these workers, the guys that wear the Carhartts, the guys that shovel and clean up the coal, and [fades]
Melissa Loveridge He's upped the stakes on his ride or die support for Colstrip. In 2019, he withheld his vote in support of a low-income health care program as leverage for a bill he believed would extend the life of Colstrip's power plant. For the last few sessions, he's also carried bills to try and make a potential transition away from coal less painful for towns like Colstrip.
Duane Ankney This ain't Bozeman, this ain't Missoula, it ain't Great Falls, it ain't Helena. If them plants shut down, there isn't another job.
Melissa Loveridge One of those bills tried to set up a trust paid for by coal companies to help local residents whose properties would be affected if coal pulls out. Kind of similar to Centralia.
Duane Ankney To make sure when the time comes that they got to leave Colstrip that they're not going to be underwater on their mortgages, that their pensions are going to be whole. They've earned that.
Melissa Loveridge That bill didn't pass. But another one did: a bill to study how the town of Colstrip could still use the water right and infrastructure owned by the power plant companies. If coal does go bust, Duane, like Jim at the Economic Development Corporation and Bob in Centralia, hopes another industry could come in and turn Colstrip into its new home base. A lot of that expensive infrastructure already exists around Colstrip.
Duane Ankney They could run a gas line in here and use gas turbines to generate power [fades]
Melissa Loveridge And that would still provide some jobs and be a good tax base for Colstrip. He even sees that there's job opportunities in cleaning up after the mine or the plant shut down. Mine reclamation already provides some jobs, and Duane sees the potential for more employment in that realm, doing things like cleaning up waste from coal ash. Duane says that other industries have kind of sniffed around Colstrip, but nothing has come to fruition yet. That doesn't mean that it won't.
Duane Ankney We'll just have to wait and see, you know. Maybe it'll be a retirement community, I don't know. Got an excellent fish pond up here.
Mara Silvers There are so many policy wonks and movers and shakers in town who are trying to pave the way for Colstrip's future, but I'm really curious about all of the other people who might not be at the table but really would be impacted by any major change. What are your parents saying about the future of Colstrip and and how they're preparing for whatever the town's going to go through next?
Melissa Loveridge Well, for my parents, Ray and Twila, and for I think a lot of people like them, the big thing is that they just want Colstrip to stay livable. And even though I don't live in Colstrip anymore, I mean, I want that too.
Ray Loveridge I think we just don't want to have a ghost town. We don't want the industries to go away. That'd end up being a blink-if-you-miss it town. We're a pretty small town already, and I think the big fear is what will be left if those industries leave.
Melissa Loveridge A lot of small-town Montanans have pretty strong ties to the place that they call home. For my mom, Twila, she wants to honor those ties, keep those friendships and stay in the community that she and my dad love.
Twila Loveridge We have several next-door neighbors, and I feel like I want to have them part of my life. Even when I retire, I want to have an involvement with the school because I am very fond of the families that will be there even after I retire. So staying in Colstrip is about staying with those people.
Melissa Loveridge This tension happening in Colstrip right now doesn't have a clear beginning or end, or even clear sides. Time is going to keep going whether Colstrip is ready for it or not. But the difference between the bust in the 1950s and what's happening now is that today Colstrip can look to its own past and now other towns as it figures out its future.
Mara Silvers Shared State is a production of Montana Free Press, Montana Public Radio and Yellowstone Public Radio. This episode was reported by Melissa Loveridge, who's also a full-time reporter at the Bozeman Daily Chronicle, where she writes about crime and courts. This episode was edited by Nicky Ouellet and produced by Nick Mott. I'm your host, Mara Silvers. We had editorial assistance from Corin Cates-Carney, Brad Tyer and Nadya Faulx. Fact checking by Jess Sheldahl, and our sound designer is Gabe Sweeney.